Fenwick & Temple (No. 2)
[2021] FamCA 221
•20 April 2021
FAMILY COURT OF AUSTRALIA
Fenwick & Temple (No. 2) [2021] FamCA 221
File number(s): BRC 13499 of 2017 Judgment of: CAREW J Date of judgment: 20 April 2021 Catchwords: FAMILY LAW – ORDERS – Stay – Where the husband argues that he is unable to make the payment of the settlement sum as ordered because he does not have the funds available and does not have assets that can be readily realised – Where the husband argues that a refusal to grant the stay will cause him prejudice if he is required to sell assets – Where the wife opposes the granting of a stay as sought by the husband – Where it is found that the balance of convenience favours the stay of at least part of the payment of the settlement sum – Where it is found that a sum of $2,000,000 is a reasonable sum given the current balance in the bank account controlled by the husband – Where upon payment of that amount the husband’s requirement to pay periodic spousal maintenance will cease – Where the stay is granted on terms and conditions. Legislation: Family Law Rules 2004 (Cth) Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Anderson & Senior (Stay Appeal) (2013) FLC 93-556
Bele & Vaughan [2011] FamCA 724
Cook’s Construction Pty Ltd v Stork Food Systems Australia Pty Ltd [2008] 2 Qd R 453
Virgtel Ltd & Anor v Zabusky & Ors (No 2) [2009] QCA 349
Number of paragraphs: 20 Date of hearing: 20 April 2021 Place: Brisbane Counsel for the Applicant: Mr Bunning Solicitor for the Applicant: Evans Brandon Family Lawyers Solicitor for the Respondent: HopgoodGanim Lawyers ORDER
BRC 13499 of 2017 BETWEEN: MR TEMPLE
Applicant husband
AND: MS FENWICK
Respondent wife
ORDER MADE BY:
CAREW J
DATE OF ORDER:
20 APRIL 2021
THE COURT ORDERS THAT:
1.Paragraphs 21 to 23 (inclusive) of the order made by this Honourable Court on 26 February 2021 be stayed pending the determination of appeal number NOA15/2021 on the following terms and conditions:
(a)The payment of $2,000,000 by Mr Temple to Ms Fenwick as a part payment of the settlement sum by the settlement date, namely, 27 April 2021;
(b)Upon payment of the said sum, paragraphs 3 (a), (b) and (c) of the order made by this Honourable Court on 14 May 2018 be discharged;
(c)Paragraph 2 of the order made on 26 February 2021 be varied by deleting the words “upon the date of settlement” and substituting the words “as soon as reasonably practicable”;
(d)Mr Temple be restrained from disposing of or further encumbering his interests in the Temple Group (as defined in the order made by this Honourable Court on 26 February 2021) and his family home without the prior written consent of Ms Fenwick save to meet day to day living expenses for himself and his family, the payment of spousal maintenance (including the payment of outgoings and maintenance of the D Street real property), child support, legal fees and to complete the purchase of the second Z Town property if required;
(e)Ms Fenwick be restrained from disposing of or encumbering the Country J real property (as defined in the order made by this Honourable Court on 26 February 2021).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fenwick & Temple has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAREW J
On 26 February 2021 I made a parenting and property settlement Order that, among other things, divided the property of the parties in the proportion of 60% to the respondent in the substantive proceedings, Mr Temple (“the husband”) and 40% to the applicant in the substantive proceedings, Ms Fenwick (“the wife”).
On 25 March 2021, the husband filed a Notice of Appeal in relation to part of the property aspect of the Order and by way of an Application in a Case filed on 1 April 2021, the husband now seeks a stay of the operation of paragraphs 21 – 23 of that Order which provide as follows:
(21) On or before the date of settlement the parties do all acts and things and sign all documents required to transfer the [husband’s] right, title and interest in the D Street real property to the [wife].
(22) The [husband] be solely responsible for all costs, liabilities and outgoings associated with the D Street real property as identified in paragraph 3(d) of the Order dated 14 May 2018, including but not limited to rates and water rates, DNR&M rental, DD home and contents insurance premiums and electricity and gas (“the D Street outgoings”) invoiced prior to the date of settlement and the [wife] shall be liable for the D Street outgoings invoiced subsequent to the date of settlement, without adjustment being made between the parties for invoices covering periods before and after settlement.
(23)The [husband] cause the payment of $7,830,521 to the [wife] on or before date of settlement.
In support of his stay application, the husband argues that he is unable to make the payment of $7,830,521 because he does not have the funds available and does not have assets that can be readily realised. The husband nevertheless concedes that he has the capacity to borrow $1,840,000 secured against his home and $500,000 secured against a property located at W Street, Z Town, (“the Z Town property”). Further, he concedes that he could utilise “a portion” of the $3,400,000[1] cash at bank of the Mr Temple Family Trust that he controls but resists any payment, in circumstances where if he is entirely successful on appeal he will retain the property located at D Street, Suburb E, (“the D Street property”) and only be required to pay the wife $1,158,485. It is argued that a successful appeal will be rendered nugatory if any sum is paid. The husband argues that only a portion of the cash at bank is available, in any event, because this is the fund from which all of his outgoings are paid (including day to day living expense, child support, spouse maintenance and legal fees) and from which taxation liabilities arising from the recent receipt of further dividends will be paid. The husband also submits that he has an obligation to complete the purchase of a property acquired by him in January 2021 for $860,000 on which he has paid a deposit of $86,000.
[1] For the period 24 December 2020 to 19 April 2021 the husband has received payments by way of dividends, a payment from the Australia Taxation Office and other payments totalling $2,174,245.
The husband submits that a stay as sought by him will not prejudice the wife in that she will continue to live in the D Street property and will continue to be supported by him in accordance with the spousal maintenance order dated 14 May 2018 which will remain in place pending the determination of his appeal. The relevant provisions of that order are as follows:
3. That by way of spousal maintenance the Husband shall pay or cause to be paid the following:
(a) The sum of $2,000 per week to the Wife, with the first such payment to commence 18 May 2018 and be paid fortnightly thereafter, and to the extent that such sum is taxable, the Husband shall pay the tax attributable thereto and shall advise the Child Support Authority that such sums ought be excluded from income attributable to the Wife;
(b) Private health insurance premiums for the Wife with BD Insurance so as to maintain the Wife’s current level of cover;
(c) The Wife’s mobile telephone account;
(d) The following outgoings in relation to the former matrimonial home at D Street, Suburb E (“the former matrimonial home”), to the relevant provider as and when they fall due:
(i) Rates and water rates;
(ii) DNR&M rental;
(iii) DD home and contents insurance premiums;
(iv) Electricity and gas.
4. That the Husband shall otherwise make the following payments:
(a) …
(b) The cost of maintenance and repairs to the former matrimonial home as may be recommended by Mr AV as being reasonably required and, in this regard, the Husband shall do all acts and things necessary to ensure that the Wife is provided with the copies of all reports, quotations and invoices rendered by Mr AV, as and when received.
The husband argues that a refusal to grant the stay will cause him prejudice if he is required to sell assets e.g. he will incur selling costs and trigger taxation liabilities, which he may not have had to sell, if his appeal succeeds. Further, if he is required to sell assets e.g. the Z Town property, he would sell the property at a loss in circumstances where it has been overcapitalised to suit his specific requirements.
The wife opposes the granting of a stay as sought by the husband. The wife contends that she is “not able to live within the funds” she is receiving from the husband each week by way of spousal maintenance and child support and particularly when the husband is late with payments, as he was recently on 10 February 2021 when the payment was not made until a date after 22 February 2021. As a result, the wife contends that she has found it necessary to borrow further funds and currently owes “Mr ZZ” the sum of $25,000. The wife also contends that she has insufficient funds to pay for “various things” that she wants or needs including travel to Country J to visit her ill mother; consult an immigration lawyer to navigate the quarantine requirements both in Country J and Australia as a result of the COVID-19 travel restrictions; pay for urgent repairs to the D Street property and repay personal borrowings. The wife also has outstanding legal costs from the trial including fees owing to Senior Counsel of $56,174.94 and Junior Counsel of $20,000 and outstanding fees to accountancy experts of $20,348.33 which she is required to pay and which she intends to pay from the settlement sum.
Each party has made open offers which would see a part payment of the settlement sum on certain terms and conditions.
LEGAL PRINCIPLES APPLICABLE TO A STAY APPLICATION
The filing of a Notice of Appeal does not of itself stay the operation or enforcement of the order appealed against.[2] However, once an appeal is filed a party may apply to stay its operation or enforcement.[3]
[2] Family Law Rules 2004 (Cth)), r 22.11(1).
[3] Ibid, r 22.11(2)
The granting of a stay is a discretionary decision which will be informed by matters such as:
(a)The bona fides of the person making the application for the stay;
(b)Whether a successful appeal will be rendered nugatory if the stay is not granted;
(c)The merits of the appeal;
(d)Any delay in bringing the stay application;
(e)When the appeal is likely to be determined; and
(f)The balance of convenience.
It is generally accepted that an applicant for a stay does not have to demonstrate a special or exceptional circumstance,[4] however, as observed by Keane JA (as his Honour then was, and with whom McMurdo P and White AJA agreed) in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd[5] at [12]:
… it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation.
(footnote omitted)
[4] Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106; cfAnderson & Senior (Stay Appeal) (2013) FLC 93-556 at 87,446, [34] (as to whether special or exceptional circumstances required); Bele & Vaughan [2011] FamCA 724; see also Cook’s Construction Pty Ltd v Stork Food Systems Australia Pty Ltd [2008] 2 Qd R 453 at 455, [12] and Virgtel Ltd & Anor v Zabusky & Ors (No 2) [2009] QCA 349 at [19].
[5] [2008] 2 Qd R 453.
Any order made by the Court may impose terms and conditions.[6]
[6] See r 1.10 of the Family Law Rules 2004 (Cth) and Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 at [18].
DISCUSSION
Despite the submission of the wife to the contrary, I am not satisfied that the application for a stay is brought other than on a bona fide basis.
To the extent that the husband might be required to sell property to meet the settlement sum, a successful appeal would be rendered nugatory in that the husband would not be able to recover either the property sold or the costs of sale or taxation incurred as a result of sale. Likewise, if the husband were required to borrow funds, the costs of borrowing would not be recoverable in the event of a successful appeal. However, the husband concedes that he has capacity to pay a portion of the settlement sum without borrowing and without selling property. Even on the husband’s case, if he is entirely successful on appeal he would be required to pay the wife a sum of $1,158,145. The fact that he would also retain the D Street property if entirely successful on appeal, does not persuade me that he would be sufficiently prejudiced such as to resist the payment of any sum.
The husband’s grounds of appeal are as follows:
(a)In making orders reflecting an adjustment of the parties' property interests such that the husband wife receive 40% thereof, and the appellant husband receive 60% thereof (Reasons [256]), the learned trial judge has failed to properly have regard to all of the evidence and the weight of the evidence.
(b)In making such orders, the learned trial judge has failed to explain, properly or at all, the reasoning by which she arrived at the said division of property interests.
(c)In concluding that the wife should receive 40% of the parties' property interests, the learned trial judge erred:
(i)In accepting that the value of the TT Pty Ltd business brought into the relationship by the husband was as valued by Mr HH as at January 2005 (Reasons [186]), whereas the actual value of the contribution was much greater as reflected by the actual earnings of the business in the subsequent years;
(ii)At Reasons [187] in refusing to assess the higher value of the initial contribution made by the Husband;
(iii)In failing to give proper and adequate consideration to the overwhelming financial contribution made by the Husband both at the inception of the parties' relationship, and during their relationship, despite so finding at Reasons [214] and [222];
(iv)In failing to give any or any proper consideration to the post-separation increase in the value of the Temple Group of entities from $17,091,282 on 31 March 2018 to $27,159,876 (as found at Reasons [184]);
(v)In failing to adequately explain why such an adjustment was just and equitable when the Wife sought such an adjustment when the value of the Temple Group of entities was $17,91,282, rather than the substantially increased value as found at the final hearing;
(vi)in refusing (at Reasons [234]) to make any adjustment for realisation costs and the payment of tax on the sale of assets that would inevitably be required for the Husband to make the cash payment necessitated by such an adjustment;
(vii)in failing to explain what adjustment was made as a result of the matters referred to at Reasons paragraph [240].
(d)The learned trial judge erred in finding that the Husband was capable of making a payment to the wife of $7,830,521 within 60 days (Reasons [260]), or at all, in circumstances where:
(i)it was not explored with the Husband at trial, nor in any other evidence, how he could do so; and
(ii)where the evidence at trial and the findings made revealed that there was not sufficient property for the Husband to make such payment, without realising assets which would in turn be the subject of capital gains tax and other realisations costs, which would in turn reduce the value of the pool;
(iii)Husband’s proposal identified at Reasons [8] required a payment to the Wife of $1,158,485.
While legitimate criticism of the formulation of some of the grounds of appeal are warranted e.g. a failure to particularise a number of the grounds, it cannot be said, that the grounds are entirely without merit.
There has been no delay in bringing the application for stay.
The appeal is likely to be heard in the July or August 2021 sittings.
The balance of convenience favours the stay of at least part of the payment of the settlement sum. The husband’s case at trial involved the payment to the wife of the sum of $1,158,485. The wife has expenses to meet and it is reasonable that she receive at least the sum proposed by the husband at trial. I nevertheless consider a sum of $2,000,000 to be a reasonable sum given the current balance in the bank account controlled by the husband. However, upon payment of that amount, the husband’s requirement to pay periodic spousal maintenance, the wife’s health insurance and mobile phone account will cease. The sum proposed to be paid is a “payment of substance” and as conceded at trial by Senior Counsel for the wife, a payment of substance would make it difficult for the wife to establish that she was unable to support herself adequately. While Ms Lahey for the wife resists the discharge of the periodic spousal maintenance order and submits that what is a “payment of substance” is relative and the wife should not have to use capital to support herself, I am nevertheless persuaded that a discharge of that part of the May 2018 order is appropriate in the circumstances of this case.
The wife does not press the transfer to her of the D Street property at this time and the parties agree that the Country J property can be transferred without delay.
In order to preserve the pool of property pending the appeal each party will be subject to restraints in dealing with property in their possession. In the husband’s case that will include his interests in the Temple Group and his family home but the restraint will not prevent his meeting day to day living expenses, spousal maintenance, outgoings and maintenance of the D Street property, child support, legal fees and settlement of the purchase of the second Z Town property. The wife will be restrained from dealing with the Country J property once it is transferred into her sole name.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 20 April 2021
0
3
1